Which Is a Better Investment, Bitcoin or Renewable Energy?

In the last few years the stock market has continued to amaze as the high tech darlings have risen to greater and greater heights. Meanwhile, bitcoin, the cryptocurrency, has skyrocketed to the $8,000 range. Now CNBC looks at bitcoin and the renewable energy sector and makes a judgement to go with renewable energy over bitcoin for the future.

The hyper focus on bitcoin is causing investors to miss another huge winner this year that they can actually understand.

Bitcoin is just one of many cryptocurrencies, and it is hard to embrace, if impossible not to follow, as it hits $8,000. It isn’t tangible, and it certainly is difficult to comprehend. Yet all we hear about is how it’s up thousands of percent this year. So you wouldn’t be blamed to figure that you simply missed the best investment of 2017 – and possibly ever.

But there’s another rising trend that’s literally right under your nose: renewable energy. Its potential returns might not come so fast, but I am confident it is here to stay, which is more than I am willing to say about bitcoin.

Successful investors and traders have a way to value investments. The most common for long term investors is intrinsic value. That calculation is based on predicted future earnings. The problem with cryptocurrencies like bitcoin or gold for that matter is that they have no future earnings. They are touted as the ultimate hedge against the demise of paper currencies. Unlike bold bullion or bitcoin renewable energy stocks can be evaluated for future earnings and those earnings are bright. The fact of the matter is that solar and wind power are not just sidelights anymore. For example the state of Iowa gets more than a third of its electricity from wind and solar.

Foreign Interference

One major issue for US solar stocks is government subsidies in China and dumping of cheap solar products in the USA. However, the dumping of the 2011 era is over and US companies are not only competitive again but also selling at increasing prices. This is not to say that foreign competition will not be an issue but wholesale dumping is hopefully a thing of the past.

How about Bitcoin?

The proof of how good an investment is comes down to how well it performs and bitcoin has performed very well this last year. The problem is that bitcoin is acting gold did in the 1970s. There is a mania among bitcoin devotees that keeps driving prices up. And like gold in the early 1980s bitcoin may well be due for a fall. Interesting the blockchain technology that supports bitcoin may have more uses and could survive a bitcoin collapse. Our sister site, Options Trading Education, wrote about this.

Bitcoin has been a great deal for some investors who got in early. But many believe that the bitcoin phenomenon is simply the 17th century Dutch tulip bulb frenzy in disguise. Nevertheless, bitcoin is based on an interesting technology called blockchain. And blockchain technology has caught the attention of banks and other institutions because of the way it allows people to transfer value without a middleman. The point about how you can make money from blockchain technology instead of speculating in bitcoin is that you can invest in companies that use this technology or a new index fund containing just such companies. Business Insider writes about stock in a new blockchain index.

If you have a small portion of your portfolio to gamble on bitcoin it might just be profitable. But if you want to sleep at night and see your investment grow over the years consider renewable energy stocks.

Disclaimer: Trading and investing involves significant financial risk and is not suitable for everyone. No content on this website should be considered as financial, trading, or investing advice. All information is intended for educational purposes only.